Puzzles and Surprises in U.S. Manufacturing
29 Pages Posted: 31 Jul 2018 Last revised: 19 Nov 2018
Date Written: July 11, 2018
Though U.S. manufacturing output recovered more slowly from the Great Recession than historical experience would have predicted, manufacturing employment, which peaked in 1979, grew between 2010 and 2017. This was the second-longest period of employment growth in the entire post-war period. Linking these developments was an historically unprecedented, protracted absolute decline in labor productivity. This essay provides an overview of these puzzling aggregate developments and of the diverse industry-level changes they summarize. The roles of foreign competition, mis-measurement of real output, and the computer industry are explored, and the value of looking within multi-industry aggregates like manufacturing is illustrated.
Keywords: manufacturing, productivity, semiconductors, imports
JEL Classification: D24, D22, L16, L60
Suggested Citation: Suggested Citation